The Ministry Of Power (MoP) Is In The Process Of Finalising Guidelines To Improve Coal Supply To Thermal Power Plants

Feb 12, 2018
Source
Power Weekly Newsletter

The Ministry of Power (MoP) is in the process of finalising guidelines to improve coal supply to thermal power plants (TPPs). These include setting up of dedicated transportation, setting up of power projects only within a distance of 500 km from coal mines, and mandatory construction of elevated closed belt conveyors for all TPPs within 20 km from pit-head of coal mine. In addition, the central government is reportedly mulling to explore opportunities in neighbouring countries like Sri Lanka, Bangladesh and Myanmar to sell power in a bid to revive the declining plant load factors in the thermal power segment.

MoP has extended the waiver of inter-state transmission and losses for solar and wind projects commissioned till March 31, 2022. Earlier the waiver was applicable for solar projects commissioned till December 31, 2019 and wind projects commissioned till March 31, 2019. The waiver will be applicable for 25 years from the date of commissioning of such projects awarded through competitive bidding.

NTPC Limited soon plans to conduct due diligence of the proposed takeover of stressed power plants. The company had expressed interest in taking over such units in late 2017 and consequently, received proposals for stressed assets aggregating 6,480 MW. The proposals include Jindal India Thermal Power Limited’s 1,200 MW Derang TPP, Lalitpur Power Generation Company Limited’s 1,980 MW Lalitpur TPP, Jaiprakash Power Ventures Limited’s (JPVLs) 1,320 MW Nigrie TPP and the 1,980 MW Barah TPP run by a subsidiary of JPVL.

Power Grid Corporation of India Limited (Powergrid) has, reportedly, emerged as the lowest bidder for the Rs 10 billion 765 kV Vindhyachal-Varanasi transmission line, a part of the New Western Region – Northern Region 765 kV Inter-Regional Corridor. Other companies which participated in the tender included Essel Infraprojects, Sterlite Power Grid Ventures, China Southern Power Grid International Company and L&T Infrastructure.

Solar Energy Corporation of India (SECI) witnessed the winning bids of Rs 2.44 per kWh and 2.45 per kWh in the latest tender for the award of 2 GW inter-state transmission system-connected wind power projects. Torrent Power Limited, ReNew Power Private Limited, Green Infra Wind Energy Limited and Inox Wind Limited quoted the lowest bid (Rs 2.43 per kWh) to secure contracts under the tender. TPL secured a capacity of 499.8 MW, ReNew Power secured 400 MW while Green Infra and Inox Wind secured a capacity of 300 MW and 200 MW respectively. The other winners included Adani Green Energy (250 MW), Alfanar (300 MW) and Betam Wind Energy, and a special purpose vehicle of France-based Engie Group (50 MW), all of which bid at Rs 2.45 per unit.

NTPC Vidyut Vyapar Nigam Limited (NVVNL) has emerged as a winner in the tender for supplying 300 MW power to Bangladesh. The tender was floated by Bangladesh Power Development Board (BPBD) for the supply of 500 MW power from India on short-term basis during June-December 2018 and on a longterm basis from January 2020 to May 2033. The supply is expected to begin after the commissioning of 500 MW high voltage direct current (HVDC) interconnection link between the two countries. Four companies including NVVNL, PTC India Limited, Adani Group and Sembcorp Industries Limited had submitted their bids for the tender.

State Sector

Gujarat Urja Vikas Nigam Limited (GUVNL) has floated a tender for developing 500 MW gridconnected solar photovoltaic (PV) power projects across the state. Further, additional 500 MW capacity may also be offered to participants willing to sign power purchase agreements (PPAs) with GUVNL at the lowest quoted tariff. The tariff would be finalised through a competitive bidding process and a reverse e-auction. The minimum project capacity for a single bidder has been capped at 25 MW, however, no ceiling has been defined. The last date for submission of proposals is March 19, 2018.

The West Bengal Power Development Corporation Limited (WBPDCL) has issued a tender for the award of 5 MW grid-connected solar photovoltaic (PV) project to be developed in the Murshidabad district of the state. The project would be developed at the Sagardighi Thermal Power Project on a turnkey basis. The project is expected to entail an investment of Rs 348.4 million and would have to be completed within 180 days from the date of contract award. The last date for the submission of bids is March 6, 2018.

Steel Authority of India Limited’s (SAIL) Rourkela Steel Plant and the Green Energy Development Corporation of Odisha (GEDCOL), a wholly owned subsidiary of Odisha Hydropower Corporation Limited (OHPC) are planning to set up a 10 MW small hydroelectric project on Mandira dam in the state. The joint venture (JV) company that has provisionally been named as Mandira Power Corporation Limited will operate and install the project at an estimated cost of Rs 788 million. SAIL and GEDCOL will have an equity partnership of 26 per cent and 74 per cent in the JV respectively.

Private Sector

Adani Power Limited’s proposal for setting up a special economic zone (SEZ) for the power sector in Jharkhand has been rejected by the Ministry of Commerce and Industry. The Rs 15 billion proposal was rejected on the grounds of being inconsistent with the power guidelines specified for SEZs in February 2016. Further, the proposal was not backed by a recommendation of the state government. The company had proposed to set up the SEZ at Godda district in Jharkhand, over an area of 425 hectares.

ABB India Limited has installed its first public electric vehicle (EV) charging station at the Niti Aayog office in Delhi. The charging station can fully charge an EV in thirty minutes. The installation is a part of the company’s endeavour to expand its Indian base in the segment.

Topaz Solar Private Limited is planning to set up a solar module manufacturing unit with an annual capacity of 500 MW in Odisha. The initiative is the first phase of the company’s project and is expected to entail an investment of Rs 2.4 billion. In the second phase of the project, the company will add 700 MW module production capacity in the state, taking the total module manufacturing capacity to 1,200 MW in the final stage. The project has been granted a single window clearance by the Odisha government.

Volvo Group India Private Limited has signed an agreement with Cleanmax Solar for long-term supply of 2.75 MW solar power to Volvo’s truck manufacturing units in Bengaluru. The move is expected to reduce Volvo’s carbon dioxide emissions by 3,380 tonnes per annum and result in significant savings for the company. Volvo is expected to start drawing power for its Hoskote and Peenya manufacturing facilities in Bengaluru from Cleanmax Solar’s Ballary facility in March 2018 for 10 years.

Financials

The Tata Power Company Limited has recorded a total income of Rs 70.41 billion in the quarter ended December 2017, an increase of 4.86 per cent compared to Rs 67.15 billion recorded in the corresponding period last year. The company registered a net profit of Rs 6.48 billion for the period, a decrease of 7.18 per cent over Rs 6.99 billion recorded during the same quarter in 2016-17.

Debt and Equity

The Competition Commission of India (CCI) has appoved the sale of Reliance Infrastructure Limited’s (RInfra) integrated Mumbai power business to Adani Transmission Limited (ATL) for Rs 18.8 billion. RInfra and ATL had signed a definitive binding agreement for the sale of RInfra’s integrated power business to ATL in December 2017. The deal is expected to be completed by March 2018 and the proceeds from the sale will be utilised by RInfra to reduce its debt.

NTPC is likely to borrow Rs 16 billion in 2018-19 to fund its capex for the capacity addition of 6,900 MW in the year. The company presently has projects totalling 21,000 MW at different stages of execution, of which, it plans to add 6,900 MW by March 2019. It is funding projects in a debt-equity ratio of 70:30 and has planned a capital expenditure of Rs 230 billion for 2018-19.

Actis LLP is planning to acquire the renewable energy assets of Karnataka based Bhoruka Group. The Rs 27 billion deal is in the final stage. The group is selling its entire renewable energy portfolio of 321 MW under its subsidiary Bhoruka Power Corporation Limited. Yes Bank is the sole investment manager for the deal.